Indian Oil Sector a Perspective

“A THOUGHT AT THE RISING INDUSTRY”

PREPARED BY: ANKUR AGGARWAL

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ORGANISATION INDIA'S POWER ,OIL & GAS SECTOR

C E R C

P TC I

P lan n in g C om m iss ion

C E A

R E C

B E F

N TP C

N H P C

P F C

N P TI

P C IL

M in is try o f P ow er

O N G C O IL

O C C IO C

G A IL B P C L

IB P H P C L

M R L C R L

B R P L M R P L

M in is try o f P e tro leu m & N atu ra l G as

G O V E R M E N T O F IN D IA

1 IOC Indian Oil Corporation 12 ONGC Oil & Natural Gas Corporation

2 GAIL Gas Authority of India Ltd 13 PCIL Power Grid Corporation India

3 HPCL Hindustan Petroleum Corporation Ltd

14 PFC Power Finance Corporation

4 IREDA India Renewable Energy Development Agency

15 PTCI Power Trading Corporation India

5 IBP Indo – Burma Petroleum Company 16 REC Rural Electricity Corpoaration

6 MRL Madras Refineries Limited 17 BPCL Bharat Petroleum Corporation Ltd

7 MRPL Mangalore Refinery & Petrochemicals Limited

18 BEF Bureau of Energy Efficiency

8 MHPC National Hydroelectric Power Corporation

19 BRPL Bangoigoon Refinery & Petrochemicals Ltd

9 NTPC National Thermal Power Coprporation

20 CRL Cochin Refineries Ltd

10 OCC Oil Coordination Commitee 21 CERC Central Electricity Regulatory Authority

11 OIL Oil India Limited 22 CEA Central Electricity Authority

LegendLegend

G .O .I HOLDINGS IN OIL & GAS SECTOR

0102030405060708090

100

OTHERGOVT

G.O.I Holdings

I Oil Companies in which Government of India have

a share holding (as on 01.04.2002).

0

1

2

3

4

5

6

7

Consumption (Quads)

CoalPetroleum

N.Gas

HydroElec

Nuclear

Renewables

Fuel Type

Fuel Consumption in India (Year - 2000)

1 QUAD = 2.52 x 1014 K .CAL

Sectoral Consumption (Year 2000)

Sectoral energy consumption by fuel (%): 1999/2000

Sector Coal Natural  gas Petroleum products

Power Total

Agriculture 0 1.3 9.5 89.2 100

Industry 73.1 2.4 13.6 10.9 100

Transport 0 0 98.5 1.5 100

Residential 0 1.1 71.3 27.6 100

Others 0 33.9 60.9 5.2 100

The industrial sector is the largest consumer of energy, consuming about half of the total commercial energy consumption in 1999/2000 . Coal and lignite meet over half of industrial commercial energy requirements. The transport sector is the next biggest consumer at 22% of total commercial energy consumption.

Sectoral Consumption(Year 2000)

91

68

9783

100 100 99104 104109

0

20

40

60

80

100

120

MM

TP

A

FY1999 FY2000 FY2001 FY2002 FY2003

Consumption Production

PETROLEUM PRODUCTS -

HISTORICAL DEMAND GROWTH Consumption grew at a CAGR of 3.4% p.a. over the last 5 years

Production registered a CAGR of 12.5% p.a. during the same period

PETROLEUM PRODUCTS DEMAND

GOING FORWARD

Demand expected to grow at a CAGR of 3.7% p.a. during X Plan period

Demand registered over 5% growth during FY2003

104 109 111

129114

137119

137124

136

020406080

100120140

MM

T

FY2003 FY2004 FY2005 FY2006 FY2007

Demand Supply

Key Facts

• Total Consumption of Energy = 3 % of World’s Total.

• Ranking = 6th in Terms of Overall Consumption Rank.

• Major Demand Drivers

•Continued Economic Development•Fast Population Growth

Total Primary Energy Production VS Total Primary Energy Consumption

0

2

4

6

8

10

12

14

Unit in Quads

1995 1996 1997 1998 1999 2000 2001

TPEPTPEC

1 QUAD = 2.52 x 1014 K .CAL

THE OIL UPSTREAM SECTOR

CRUDE SELF SUFFICIENCY LEVELS

4439

3835

32 31 31 31

20

25

30

35

40

45

50

(%)

FY 9

6

FY 9

7

FY 9

8

FY 9

9

FY 0

0

FY 0

1

FY 0

2

FY 0

3

Self sufficiency levels have declined over the years

Oil EstimateOil Estimate • Crude Oil Reserves: 4.7 Billion Barrels

• Offshore Basin Area: 380,000 Square Kilometers

• Onshore Basin Area: 1.34 million Square Kilometers

• Total Area Explored : Less Than 25 %

• Estimated Reserves : 30 Billion Tons

1 Barrel = 0.159 Tons

NELPNELP

The government in order to increase exploration activity, approved the New Exploration Licensing Policy (NELP) in March 1997 which would level the playing field in the upstream sector between private and public sector companies  in all fiscal, financial and contractual matters.  

Salient Features - NELPSalient Features - NELP  

1) No mandatory state participation

2) The two public sector upstream companies would compete for petroleum exploration licenses, instead of the existing system of granting of licenses on nomination basis. The public sector Companies will also be able to avail of the fiscal and contract benefits available to private companies. 

Salient Features - NELPSalient Features - NELP

3)  Open availability of exploration acreage

to provide a continuous window of

opportunity to companies.   4) Freedom to the contractors for the

marketing of crude oil and gas in the

domestic market.  5) Royalty payments & encouragement in

Deep Water Exploration

Numbers - NELPNumbers - NELP

25 25

27

24

25

26

27

Blocks

2000 2001 2003

Year

Share of Blocks awarded to Various Players in 2002

ONGC

HARDY OIL + RELIANCE

OTHERS

Exploration & New Discoveries(2002-03)Exploration & New Discoveries(2002-03)

Major Areas:1. Cambay Basin2. K-G Basin3. North East

India

Major FindsMajor Finds

ONGC and OIL, made 9 significant hydrocarbon in year 2002 discoveries of which 6 are onland and 3 offshore.

1. Onland Discoveries in Upper Assam like Baghjan , Banamali & Rajastan Basin at Chinnewala Tibba

2. Offshore Wells in K G Basin & Vasai West

National Oil Companies

Players Involved

• Reliance Industries.• Cairn Energy• Niko Resources• Essar-POGC consortium

Three major areas :

• Krishna-Godavari offshore, • Gulf of Cambay• Onland Rajasthan.

Private / JV Companies

• Apart from Cairn Energy Pty. Ltd. (CEIL) The consortium of Reliance Industries Ltd. (RIL) and Niko Resources Ltd., made a spectacular series of gas discoveries in their deep water block KG-DWN-98/3 through the drilling and testing of Dhirubhai wells 1,2,3 and 4. In fact, the Dhirubhai-1 discovery was the world’s largest gas discovery in 2002.

• Gulf of Cambay block CB-OS/2, operated by Cairn Energy,

• In block CB-ONN-2000/2 of on land Cambay basin, Niko Resources

• In the Rajasthan on land block RJ-ON-90/1 in the Barmer-Sanchor basin, Operated by Cairn. In block RJ-ON-90/5 of the Bikaner-Nagaur basin, Nanuwala Well No.1, by the Essar-POGC consortium.

THE OIL UPSTREAM

SECTOR

Petroleum Production Vs Consumption in India (1995 – 2001)

0

500

1000

1500

2000

2500

Consumption

1995 1996 1997 1998 1999 2000 2001

Year

Production

Production (Crude Oil)

Consumption

Unit :Thousand b/d

Crude Production Vs Refining Capacity

35.2

56.4

32.8

62.2

31.9

112.0

32.4

112.5

32.1

114.7

33.1

114.7

0

20

40

60

80

100

120

MM

T

FY95 FY99 FY00 FY01 FY02 FY03

Crude Production Refining Capacity

The gap being met through imports

The Refinery Network

Major Players

• IOCL

• Reliance

Annual Refinery Output

RPL24%

MRPL8%

BPCL15%

HPCL11%

IOC42%

ONGC0.1%

Refining Capacity 114.7 MMT

India’s Refinery Output

• Present Out Put : 121.68 million Tons

• Estimated Demand : 163.8 million Tons

• Major Items Imported:

• Kerosene

• Distillate Fuel Oil

Future ProjectionMajor Proposed Refiniries include:

•Proposed by IOCL at Paradip (Orissa)

•Essar Group at Vandinar ( Gujarat)

•Bharat Oman Refinery Limited by BPCL (Bina )

•IOCL & Kuwait Petroleum Corporation at (Abahya Chandrapur, Orissa)

•BPCL - SHELL in Madya Pradesh

•Punjab Refinery Project ( Bhatinda)

Sl No

Name Capacity Place

1 M/s International + Petroleum SA + (BVI), Switzerland

5.00 MMTPA West Coast of Gujarat

2 M/s Black Gold, Andhra Pradesh 2.5 MMTPA Visakhaptnam A.P.

3 M/s Petro Energy, Pondicherry 4.8 MMTPA Pondi- cherry

4 M/s Jindal Ferro, Andhra Pradesh 6.00 MMTPA Andhra Pradesh

5 M/s Aban Lloyd , 3.00 MMTPA Tamilnadu

6 M/s Moplac Udyog, Haldia West Bengal 3.00 MMTPA Haldia

7 PRA Petrochemicals Ltd 9 MMTPA Srikakulam

8 M/s Sterlite Industries (India) Ltd 3 MMTPA Tuticorin Tamilnadu

Approved Private Investments

ExpansionsExpansionsTotal of five expansion projects are underway of the Public Sector Undertaking (PSU) refineries during the Ninth Five Year Plan. These include: Indian Oil Corporation Ltd. (IOCL),  Koyali (Gujarat)- 4.20 million metric tonnes (MMT); Hindustan Petroleum Corporation Ltd., Visakhapatnam (Andhra Pradesh) - 3.00 MMT; IOCL Barauni (Bihar) - 2.70 MMT; IOCL Haldia (West Bengal) - 2.25 MMT; IOCL Mathura (U.P.) - 0.50 MMT.

    Further three expansion programmes of PSU refineries are under implementation for commissioning in the Tenth Five Year Plan. These are: IOCL Panipat (Haryana) 6.00 MMT; Bharat petroleum Corporation Ltd., Mumbai -–5.10 MMT; Chennai Petroleum Corporation Ltd., Chennai – 3.00 MMT.   

INFRASTRUCTUREINFRASTRUCTURE

The Pipeline Network

LNG Terminals LPG Terminals

The PipelinesThe Pipelines

The Oil Pipeline Network

Major Players•OIL

•ONGC

•PETRONET India Ltd ( IOCL+ BPCL+HPCL & OTHER PRIVATE PLAYERS)

Pipeline Over-View

IOC48%

HPCL20%

BPCL9%

PIL23%

Product Pipelines 49.79 MMT

Crude Pipelines 28.5 MMT

IOC100%

IOC is the only downstream company that owns crude pipelines

SUMMARY

Oil India Ltd. (OIL) transports all crude oil produced in northeast India to five refineries (Digboi, Numaligarh, Guwahati, Bongaigaon, and Baurani) via a 1,157 kilometer pipeline. The Oil and Natural Gas Corporation Ltd. (ONGC) has a 7,900 kilometer onshore pipeline network, while its offshore activities include a 3,200 kilometer pipeline network.

India transports just 45% of its petroleum products via pipeline. Petronet India Ltd. (PIL) was created by in 1998 under a directive of the Government of India with the objective to constructing additional product pipelines. PIL is owned by three of India's oil refining companies (IOCL, BPCL, and HPCL) and other outside investors (including Gaz de France);

FUTURE PROJECTIONS

PIL is building pipelines that are expected to add 500,000 b/d to India's present 325,000 b/d of pipeline capacity for the transportation of refined oil products. Of its eight projects, two are in operation (the Vadinar Kandla pipeline in Gujarat and the Kochi Karur pipeline in Kerala and Tamil Nadu states), two others are under construction (the Mangalore Bangalore pipeline in Karnataka and the Chennai Madurai pipeline in Tamil Nadu), two more have been approved (the Bina Kanpur pipeline in Madhya Pradesh, the Paradip Rourkela pipeline in Orissa, with one more in planning (the Bhatinda Pathankot pipeline in Punjab).

Major Player

• GAIL

Gas Pipeline Network

Gas Transmission

The Gas Authority of India Ltd. (GAIL) is the largest gas transmission and marketing company in the country

TOTAL SHARE – 95%

Pipeline network – 4400 KMPipeline network – 4400 KM.

Major Pipelines1. 2300 KM H.B.J Pipeline

2. World’s Longest LPG Pipeline 1250 KM ( Gujarat – Rajastan – Delhi)

GAS DEMAND

ENERGY SCENARIO

GOING FORWARD

33.8

10.4

52.1

2.5

1.2

35.8

10.2

49.3

3.2

1.5

33.7

10.1

50.3

3.4

2.5

25

20

50

2

3

FY 2002 FY 2007 FY 2012 FY 2025

Share of Future Energy Supply (%)

Oil Gas Coal Hydel Nuclear

Source: Hydrocarbon Vision 2025

Gas to replace the demand for oil and is expected to constitute 20% of the energy supply by 2025

SUPPLY VS DEMAND INDIA

MAJOR MARKET DRIVERS

The Future Projections(Cross – Country)

The Future Projections(Within - Country)

LNG Market

LNG TerminalsIndia is investing heavily in LNG infrastructure importing up to 50 million

metric tons per year (mmt/y) of LNG. These terminals would be located at Jamnagar, Dahej, Hazira, Pipavav, Trombay, Dabhol, Mangalore, Kochi, Ennore, Kakinada, Gopalpur, and Paradeep. PIL will be the largest player in their construction and operation .

The first of these that will come into operation will be at Dahej in Gujarat state, which may come online in early 2004. Petronet is now constructing it, and has plans to build another at Kochi in Kerala state. RasGas of Qatar has contracted to supply the Dahej and Kochi terminals with 7.5 million tons of LNG per year for 25 years. Reliance Industries is involved with terminals at Hazira and Janmagar which will be able to handle 5 mmt/y. Shell is involved in the 2.5 mmt/y Hazira terminal for which Oman is scheduled to provide the natural gas

LPG Bottling Plants

Main Players

•IOC

•SHV

•SPIC-CALTEX

•Shri Shakti

•Bharat Shell

•HALPG

•GCTPCL

LPG Consumption India(000 Tonnes)

Period Consumption% increase

annually

1980-81 405  

1985-86 1241 41

1990-91 2415 19

1992-93 2866 9

1994-95 3434 6

1995-96 3849 12

1996-97 4198 9

1997-98 4660 11

1998-99 5027 8

1999-2000 5902 17

2000-01 6500* 10

2001-02 7300* 12

2006-07 10148* 8

2010-2011 12325* 5

Proposed Terminals India

IOC has a dominant share in marketing infrastructure with over 50% share in all segments

Product Storage Infrastructure

IOC IBP Others TOTAL

LPG bottling capacity (TMT) 3321 0 3040 6361

Lube Blending Capacity (TMT) 583 50 390 1023

Depots/Terminals (Nos.) 176 15 220 411

LPG Bottling Plants(Nos.) 79 0 80 159

Aviation fuel stations (Nos.) 93 0 29 122

Appendices

Resources on Internethttp://www.indiainfoline.com

http://www.tradepartners.gov.uk/oilandgas

http://www.indiacore.com/oil&gas.html

http://petroleum.nic.in

http://www.teriin.org/energy/energy.htm

http://www.eia.doe.gov/emeu/cabs/india.html

http://www.asiatradehub.com/india/oil.asp

http://www.petrochemnext.com/htmlfiles/refineries.htm

http://www.indialpg.com/html/india.htm

http://www.dghindia.org./index.html

http://www.ficci.com/ficci/india-profile/home2.htm

http://www.ril.com/eportal/VirtualPageView.jsp?page_id=1620

http://www.fe.doe.gov/international/india.html

http://www.odci.gov/cia/publications/factbook/geos/in.html

Websites of Indian Petroleum Companies

Slno Name Of the Company Website1 Kochi Refineries http://www.kochirefineries.com2 Indian Petroleum Corporation limited http://www.ipcl.co.in/ipcl/about/index.htm3 Oil & Natural Gas Corporation Limited http://www.ongcindia.com4 Hindustan Petroleum Corpotration Limited http://www.hindpetro.com 5 Bharat Petroleum Corporation limited http://www.bharatpetroleum.com6 Essar Pvt Limited http://www.essar.com7 Gujarat Gas http://www.gujaratgas.com8 Chennai Petroleum Corporation limited http://www.cpcl.co.in9 MRPL http://www.adityabirla.com/companies/index.html 10 Gas Authority of India Limited http://www.gail.nic.in

http://www.indianoilweb.comhttp://www.indianoilcorp.comhttp://www.iocl.com

12 Reliance Industries http://www.ril.com13 Bongaigaon Refinery & Petrochemicals www.brplindia.com14 Engineers India Limited www.engineersindia.com15 Lubrizol India Limited http://petroleum.nic.in/lil.htm16 Numaligarh Refinery Limited http://petroleum.nic.in/nrl.htm

Indian Oil Corporation limited11

ConversionsMain Conversions used in Petroleum Industry/Products

Main Conversions used in Petroleum Industry/Products

Commercial energy balance (million tonnes of oil equivalent): 1999/2000

Commercial energy balance (million tonnes of oil equivalent): 1999/2000

The End

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